2016 (5) TMI 1198 - AT - Central Excise

Demand of duty - Capacitors cleared by BCEPL without payment of duty under the cover of challans and documents in the name of BCPL - Held that - on careful consideration of the evidences as analyzed by the Commissioner (Appeals) it is clear that the clearances of excisable goods from the premises of BCEPL could not be attributed to the old stock of capacitors purported to have been cleared in 1994 to the Indore Office of BCPL. There are sufficient evidences to support the conclusion of the lower authorities. Further the inconsistencies in the pleas made by BCEPL tends to support the case of non-duty paid clearances. Period of limitation - Demand of modvat credit - inputs not utilized in the manufacture of final product - Held that - it is seen that BCEPL have opted out of modvat scheme to avail exemption at the end of financial year 1998-99. Due intimation has been given to the Department. In the impugned order the demand of modvat credit was set aside on the ground of time bar. It is a fact that the allegation of inputs having not been used in the manufacture of final product before opting out of modvat scheme has been based on the modvat accounts RG-I and other records maintained by the BCEPL. As pointed out in the impugned order there is no allegation of clandestine removal of goods on which credits were availed. I agree with the findings of the ld. Commissioner (Appeals) on this issue of demand being hit by time bar. Demand of modvat credit - wires and cables cleared under various challans - Held that - the findings of the ld. Commissioner (Appeals) is that these cables and wires have been cleared by BCEPL in connection with installation work for MPEB at various places. It is an admitted fact that these cables and wires are required for such installation. In the absence of evidences on record to the contrary there is nothing to indicate that BCEPL have collected amount over and above the invoices raised to MPEB and as such the demand on wires and cables could not be sustained. I agree with the findings of the ld. Commissioner (Appeals) in this regard. Reduction of penalty by Commissioner (Appeals) - Section 11 AC of the Act - Held that - ld. Commissioner (Appeals) examined the applicability of Section 11 AC introduced on 28.09.96. Considering the application of legal provisions during the material time and also considering the findings on duty liability as well as the period involved in such liability the Commissioner (Appeals) had examined and given his findings in the impugned order. There is no infirmity in the said findings. Similarly regarding penalties on BCEPL and Shri Ajit Bhandari the impugned order requires no modification in view of the above analysis and findings. The impugned order is upheld - Appeals dismissed

Summary

Issues:
- Duty demand on capacitors cleared under the cover of challans and documents in the name of another entity.
- Demand of modvat credit on inputs not utilized in the manufacture of final product.
- Demand of modvat credit relating to wires and cables cleared under various challans.

Analysis:

Issue 1:
The case involved a dispute over duty demand on capacitors cleared by the appellant without payment of duty under the cover of documents in the name of another entity. The appellant argued that the capacitors were not manufactured by them and were not liable for central excise duty. The lower authorities found evidence supporting the duty demand, emphasizing inconsistencies in the appellant's claims. The Commissioner (Appeals) upheld the duty demand, concluding that the appellant was liable for central excise duty, except for specific capacitors. The Tribunal found the lower authorities' conclusions well-supported by evidence and dismissed the appellant's arguments.

Issue 2:
Regarding the demand of modvat credit on inputs not utilized in the manufacture of the final product, the appellant had opted out of the modvat scheme before the end of the financial year 1998-99. The demand was set aside on the grounds of being time-barred, as there was no allegation of clandestine removal of goods on which credits were availed. The Tribunal agreed with the Commissioner (Appeals)'s findings on this issue, supporting the decision to set aside the demand based on the time bar.

Issue 3:
The demand of modvat credit relating to wires and cables cleared under various challans was also contested. The Commissioner (Appeals) found that the wires and cables were cleared for installation work and that there was no evidence of overcharging. Consequently, the demand on wires and cables was deemed unsustainable. The Tribunal concurred with the Commissioner (Appeals)'s findings on this issue, supporting the decision that the demand could not be sustained due to lack of evidence.

In conclusion, the Tribunal upheld the impugned order, dismissing all appeals against it. The detailed analysis of each issue, including the duty demand on capacitors, modvat credit issues, and penalties, supported the decision to uphold the lower authorities' findings.